Showing 9 of 105 Publications in US Constitution

More of a Declaration than a Constitution

Popular Media Times are rough in West Philadelphia. Between the ouster of our president at Penn and billionaire donors taking their money elsewhere, I have never been so relieved that . . .

Times are rough in West Philadelphia. Between the ouster of our president at Penn and billionaire donors taking their money elsewhere, I have never been so relieved that most of America can’t quite tell the difference between Penn and Penn State.  Although higher education seems to be in turmoil nationwide, the situation feels particularly dire here.

Read the full piece here.

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ICLE Amicus to the 9th Circuit in NetChoice v Bonta

Amicus Brief INTEREST OF AMICUS CURIAE[1] The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy center that builds intellectual foundations . . .

INTEREST OF AMICUS CURIAE[1]

The International Center for Law & Economics (“ICLE”) is a nonprofit, non-partisan global research and policy center that builds intellectual foundations for sensible, economically grounded policy. ICLE promotes the use of law and economics methodologies and economic learning to inform policy debates and has longstanding expertise evaluating law and policy.

ICLE has an interest in ensuring that First Amendment law promotes the public interest by remaining grounded in sensible rules informed by sound economic analysis. ICLE scholars have written extensively on issues related to Internet regulation and free speech, including the interaction of privacy rules and the First Amendment.

SUMMARY OF ARGUMENT

While the District Court issued a preliminary injunction against California’s Age-Appropriate Design Code (AADC), it did so under the commercial speech standard of intermediate scrutiny. Below we argue that the Ninth Circuit should affirm the District Court’s finding that plaintiffs are likely to succeed on the merits in their First Amendment claim, but also make clear that the AADC’s rules that have the effect of restricting the access of minors to lawful speech should be subject to strict scrutiny.

The First Amendment protects an open marketplace of ideas. 303 Creative LLC v. Elenis, 600 U.S. 570, 143 S. Ct. 2298, 2311 (2023) (“‘[I]f there is any fixed star in our constitutional constellation,’ it is the principle that the government may not interfere with ‘an uninhibited marketplace of ideas.’”) (quoting West Virginia Bd. of Ed. v. Barnette, 319 U.S. 624, 642 (1943) and McCullen v. Coakley, 573 U.S. 464, 476 (2014)). In fact, the First Amendment protects speech in this marketplace whether the “government considers… speech sensible and well intentioned or deeply ‘misguided,’ and likely to cause ‘anguish’ or ‘incalculable grief.’”  303 Creative, 143 S. Ct. at 2312 (quoting Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, Inc., 515 U.S. 557, 574 (1995) and Snyder v. Phelps, 562 U.S. 443, 456 (2011)).

The protection of the marketplace of ideas necessarily includes the creation, distribution, purchasing, and receiving of speech. See Brown v. Ent. Merchs. Ass’n, 564 U.S. 786, 792 n.1 (2011) (“Whether government regulation applies to creating distributing or consuming speech makes no difference” for First Amendment purposes). In other words, it protects both the suppliers in the marketplace of ideas (creators and distributors), and the consumers (purchasers and receivers).

No less than other speakers, profit-driven firms involved in the creation or distribution of speech are protected by the First Amendment. See 303 Creative LLC v. Elenis, 600 U.S. 570, 600 (2023) (“[T]he First Amendment extends to all persons engaged in expressive conduct, including those who seek profit.”). This includes Internet firms that provide speech platforms. See Reno v. ACLU, 521 U.S. 844, 870 (1997); NetChoice, LLC v. Moody, 34 F.4th 1196, 1213 (11th Cir. 2022).

Even minors have a right to participate in the marketplace of ideas, including as purchasers and receivers. See Brown, 564 U.S. at 794-95 (government has no “free-floating power to restrict ideas to which children may be exposed”). This includes the use of online speech platforms. See NetChoice, LLC v. Griffin, 2023 WL 5660155, at *17 (W.D. Ark. Aug. 31, 2023) (finding Arkansas’s Act 689 “obviously burdens minors’ First amendment rights” by “bar[ring] minors from opening accounts on a variety of social media platforms”).

This is important because online firms, especially those primarily involved in curating and creating content, are central to the modern marketplace of ideas. See Packingham v. North Carolina, 582 U.S. 98, 107 (2017) (describing the Internet as “the modern public square” where citizens can “explor[e] the vast realms of human thought and knowledge”).

Online firms primarily operate as what economists call “matchmakers” or “multisided platforms.” See David Evans & Richard Schmalensee, Matchmakers: The New Economics of Multisided Platforms 10 (2016). “[M]atchmakers’ raw materials are the different groups of customers that they help bring together. And part of the stuff they sell to members of each group is access to members of the other groups. All of them operate physical or virtual places where members of these different groups get together.  For this reason, they are often called multisided platforms.” Id. In this sense, they are very similar to newspapers and cable operators in attempting to attract attention through interesting content so that advertisers can reach them.

Online platforms bring together advertisers and users—including both speakers and listeners—by curating third-party speech as well as by producing their own content. The goal is to keep users engaged so advertisers can reach them. For many online platforms, advertisers cross-subsidize access to content for users, to the point that it is often free. Online platforms are in this sense “attention platforms” which supply content to its users while collecting data for targeted advertisements for businesses who then pay for access to those users. To be successful, online platforms must keep enough—and the right type of—users engaged so as to maintain demand for advertising. But if platforms fail to curate and produce interesting content, it will lead to users using them less or even leaving altogether, making it less likely that advertisers will invest in these platforms.

The First Amendment protects this business model because it allows entities that have legally obtained data to use it for both for the curation of speech for its users and targeted advertising. See Sorrell v. IMS Health, Inc., 564 U.S. 552, 570-71 (2011) (finding that there is a “strong argument” that “information is speech for First Amendment purposes” and striking down a law limiting the ability of marketers to use prescriber-identifying information for pharmaceutical sales). The First Amendment also protects the gathering of information when it is “inherently expressive.” Cf. Project Veritas v. Schmidt, 72 F.4th 1043, 1055 (9th Cir. 2023) (citing cases that have found the act of filming or recording are inherently expressive activity). Gathering of online data for targeted advertising makes it as inherently expressive as the act of filming or recording is for creating media.

Moreover, due to the nature of online speech platforms, the collection and use of data is “inextricably intertwined” with the curation of protected, non-commercial speech. Cf. Riley v. Nat’l Fed’n of the Blind of N.C., 487 U.S. 781, 796 (1988); Dex Media West, Inc. v. City of Seattle, 696 F.3d 952, 958 (9th Cir. 2012).

By restricting use of data, the AADC will prevent online platforms from being able to tailor their products to their users, resulting in less relevant—and in the case of minors, less appropriate—content. Online platforms may also be less likely to effectively monetize through targeted advertisements. Both situations will place platforms in a situation that may require a change in business model, either by switching to subscriptions or by excluding anyone who could possibly be a minor. Thus, restrictions on the collection and use of data for the curation of content and targeted advertising should be subject to strict scrutiny, as the result of such restrictions will be to restrict minors’ access to lawful online speech.

Under strict scrutiny, California bears the burden of showing it has a compelling governmental interest and that the restriction on speech is narrowly tailored to that interest. It can do neither.

First, California fails to establish a compelling government interest because it has failed to “identify an ‘actual problem’ in need of solving.” Brown, 564 U.S. at 799 (quoting United States v. Playboy Entertainment Group, Inc., 529 U.S. 803, 822-23 (2000)). There is no more evidence of a direct causal link between the use of online platforms subject to the AADC and harm to minors than there was from the video games at issue in Brown. Cf. id. at 799-801. In fact, the best available data does “not support the conclusion that social media causes changes in adolescent health at the population level.” See Nat’l Acad. Sci. Engineering & Med., Social Media and Adolescent Health at 92 (2023).

Second, California’s law is not narrowly tailored because the requirements that restrict minors’ access to lawful content are not the least restrictive means for protecting minors from potentially harmful content. Cf. Playboy, 529 U.S. at 823-25 (finding the voluntary use of blocking devices to restrict access to adult channels is less restricting than mandating the times such content may be made available); Aschroft v. ACLU, 542 U.S. 656, 667-70 (2004) (finding filtering software a less restrictive alternative than age verification). Parents and minors have technological and practical means available to them that could allow them to avoid the putative harms of Internet use without restricting the access of others to lawful speech. Government efforts to promote the creation and use of such tools is a less restrictive way to promote the safety of minors online.

In sum, the AADC is unconstitutional because it would restrict the ability of minors to participate in the marketplace of ideas. The likely effects of the AADC on covered businesses will be to bar or severely restrict minors’ access to lawful content.

ARGUMENT

California has argued that the AADC regulates only “conduct” or “economic activity” or “data” and thus should not be subject to First Amendment scrutiny. See Ca. Brief at 28. But NetChoice is correct to emphasize that the AADC is content-based, as it is designed to prevent minors from being subject to certain kinds of “harmful” First Amendment-protected speech. See NetChoice Brief at 39-41. As such, the AADC’s rules should be subject to strict scrutiny. In this brief we emphasize a separate reason that the AADC should be subject to strict scrutiny: the restrictions on data gathering for curation of speech and targeted advertising will inevitably lead to less access to lawful online speech platforms for minors.

In Part I we argue that gathering data for the curation of speech and targeted advertising is protected by the First Amendment. In Part II we argue that the collection of data for those purposes is inextricably linked, and thus the AADC’s restrictions on the collection of data for those purposes should be subject to strict scrutiny. In Part III we argue that the AADC fails strict scrutiny, both for a lack of a compelling government interest and because its restrictions are not narrowly tailored.

I. GATHERING DATA FOR THE CURATION OF SPEECH AND TARGETED ADVERTISING IS PROTECTED BY THE FIRST AMENDMENT

Online platforms attract users by curating content and presenting it in an engaging way. To do this effectively requires data. Moreover, that same data is useful for targeted advertising, which is the primary revenue source for most online platforms, which are multisided platforms. This is a protected business model under First Amendment principles.

First, display decisions by communications platforms on how best to present information to its users is protected by the First Amendment. Cf. Miami Herald Pub. Co. v. Tornillo, 418 U.S. 241, 258 (1974) (“The choice of material to go into a newspaper, and the decisions made as to limitations on the size and content of the paper, and treatment of public issues and public officials—whether fair or unfair—constitute the exercise of editorial control and judgment.”). Limitations on the right of a communications platform to curate its own content come only from the marketplace of ideas itself: “The power of a privately owned newspaper to advance its own political, social, and economic views is bounded by… the acceptance of a sufficient number of readers—and hence advertisers—to assure financial success.” Id. at 255 (quoting Columbia Broad. Sys., Inc. v. Democratic Nat’l Comm., 412 U.S. 94, 117 (1973) (plurality)).

Second, the use of data for commercial purposes is protected by the First Amendment. See Sorrell, 564 U.S. at 567 (“While the burdened speech results from an economic motive, so too does a great deal of vital expression.”). No matter how much California wishes it were so, the AADC’s restrictions on the “sales, transfer, and use of” information is not simply regulation of economic activity.  Cf. id. at 750. On the contrary, the Supreme Court “has held the creation and dissemination of information are speech within the meaning of the First Amendment.” Id. Among the protected uses of data is creating tailored content, including marketing. See id. at 557-58 (describing the use of “detailing” where drug salespersons use prescribing history of doctors to present a particular sales message.).

Third, even the collection of information can be protected First Amendment activity. For instance, in Project Veritas, this court found that an audio or video recording “qualifies as speech entitled to the protection of the First Amendment.” See 72 F.4th at 1054. This is because the act of recording itself is “inherently expressive.” Id. at 1055. Recording is necessary to create the speech at issue.

Applying these principles here leads to the conclusion that the targeted advertising-supported business model of online platforms is protected by the First Amendment. Online platforms have a right to determine what to curate and how to display that content on its platform, as they seek to discover whether it serves its users and advertisers in the marketplace of ideas, much like the newspaper in Tornillo. Using data to better curate content to users and to offer them more relevant advertisements is protected, as in Sorrell. And the collection of data to curate speech and offer them targeted advertisements is as “inherently expressive” as the act of recording is for making a video in Project Veritas.

II. STRICT SCRUTINY SHOULD APPLY TO THE AADC’S RESTRICTIONS ON DATA COLLECTION FOR THE CURATION OF SPEECH AND TARGETED ADVERTISING

The question remains what level of scrutiny the AADC’s restrictions on data collection for curation and targeted advertising should face. The District Court applied only intermediate scrutiny, assuming that this was commercial speech. See Op. at 10-11 (in part because the AADC’s provisions fail intermediate scrutiny anyway). But the court noted that if expression involved commercial and non-commercial speech that is “inextricably intertwined,” then strict scrutiny would apply. See id. at 10. This is precisely the case, as online multisided platforms must have data both to effectively curate content and to offer targeted advertisements which subsidize users’ access. Targeted advertising is inextricably intertwined with the free or reduced-price access of users to these online platforms.

Over time, courts have gained more knowledge of how multisided platforms work, specifically in the antitrust context. See Ohio v. American Express, 138 S. Ct. 2274, 2280-81 (2018) (describing how credit card networks work). But this also has important relevance in the First Amendment context where advertisements often fund the curation of content.

For instance, in Dex Media West, this court considered yellow page directories and found that the protected speech of the phonebooks (i.e. telephone numbers) was inextricably intertwined with the advertisements that help fund it. See 696 F.3d at 956-65. The court found the “[e]conomic reality” that “yellow pages directories depend financially upon advertising does not make them any less entitled to protection under the First Amendment.” Id. at 963-64. The court rejected the district court’s conclusion that “economic dependence was not sufficient to intertwine commercial and noncommercial elements of the publication,” id. at 964, as the same could be said of television stations or newspapers as well, but they clearly receive full First Amendment protection for their speech. The court concluded that:

Ultimately, we do not see a principled reason to treat telephone directories differently from newspapers, magazines, television programs, radio shows, and similar media that does not turn on an evaluation of their contents. A profit motive and the inclusion or creation of noncommercial content in order to reach a broader audience and attract more advertising is present across all of them. We conclude, therefore, that the yellow pages directories are entitled to full First Amendment protection. Id. at 965.

Here, this means the court should consider the interconnected nature of the free or reduced-price access to online content and targeted advertising that is empowered by data collection. Online platforms are, in this sense, indistinguishable “from newspapers, magazines, television programs, radio shows, and similar media…” that curate “noncommercial content in order to reach a broader audience and attract more advertising.” Id. The only constitutional limits on platforms’ editorial discretion arise from the marketplace of ideas itself. Cf. Tornillo, 418 U.S. at 255.

To find otherwise will lead to detrimental effects on this business model. Without data collection, not only will online platforms serve less relevant content to users but also less relevant advertising. This will make the platforms less lucrative for advertisers and lead to upward pricing pressure on the user-side of online platforms. Online platforms will be forced to change their business models by either charging fees (or raising them) for access or excluding those users subject to the regulation. Excluding minors from accessing lawful speech clearly implicates the First Amendment and is subject to strict scrutiny. Cf. Brown, 564 U.S. at 794-95, 799 (the Act “is invalid unless California can demonstrate that it passes strict scrutiny”).

III. THE AADC FAILS STRICT SCRUTINY

The District Court determined that the AADC’s provisions would fail under either intermediate or strict scrutiny. This court should affirm the district court, but also make clear that strict scrutiny applies.

A. There Is No Compelling Government Interest

Under strict scrutiny, the government must “specifically identify an ‘actual problem’ in need of solving.” Brown, 564 U.S. at 799 (quoting Playboy, 529 U.S. at 822-23).

In Brown, the Supreme Court found that California’s evidence linking exposure to violent video games and harmful effects on children was “not compelling” because it did “not prove that violent video games cause minors to act aggressively.” Id. at 800 (emphasis in original). At best, there was a limited correlation that was “indistinguishable from effects produced by other media” not subject to the rules. Id. at 800-01.

The same is true here. The literature on the relationship between Internet use and harm to minors simply does not establish causation.

For instance, the National Academies of Science, Engineering, and Medicine has noted that there are both benefits and harms from social media use for adolescents. Nat’l Acad. Sci. Engineering & Med., Social Media and Adolescent Health at 4 (2023) (“[T]he use of social media, like many things in life, may be a constantly shifting calculus of the risky, the beneficial, and the mundane.”). There are some studies that show a very slight correlation between “problematic social media use” and mental health harms for adolescents. See Holly Shannon, et al., Problematic Social Media Use in Adolescents and Young Adults: Systematic Review and Meta-analysis, 9 JMIR Mental Health 1, 2 (2022) (noting “problematic use characterizes individuals who experience addiction-like symptoms as a result of their social media use”). But the “links between social media and health are complex.” Social Media and Adolescent Health at 89.

The reasons for this complexity include the direction of the relationship (i.e., is it because of social media usage that a person is depressed or does someone use social media because they are depressed?), and whether both social media usage and mental health issues are possibly influenced by another variable(s). Moreover, it is nearly impossible to find a control group that has not been exposed to social media. As a result, the National Academies’ extensive review of the literature “did not support the conclusion that social media causes changes in adolescent health at the population level.” Id. at 92.

The AADC applies to far more than just social media, however, extending to any “online service, product, or feature” that is “likely to be accessed by children.” See Cal. Civ. Code § 1798.99.30 (b)(4). There is little evidence that general Internet usage is correlated with harm to minors. According to one survey of the international literature, the prevalence of “Problematic Internet Use” among adolescents ranges anywhere from 4% to 20%. See Juan M. Machimbarrena et al., Profiles of Problematic Internet Use and Its Impact on Adolescents’ Health-Related Quality of Life, 16 Int’l J. Eviron. Res. Public Health 1, 2 (2019). This level of harmful use suggests the AADC’s reach is overinclusive. Cf. Brown, 564 U.S. at 805 (Even when government ends are legitimate, if “they affect First Amendment rights they must be pursued by means that are neither seriously underinclusive nor seriously overinclusive.”).

Moreover, the rules at issue are also underinclusive, even assuming there was a causal link. The AADC does not extend to the same content offline and also likely to be accessed by children, even if also supported by advertising, it would not be subject to those regulations. California has offered no reason to think that accessing the same content while receiving advertising offline would be less harmful to minors. Cf. Brown, 564 U.S. at 801-02 (“California has (wisely) declined to restrict Saturday morning cartoons, the sale of games rated for young children, or the distribution of guns. The consequence is that its regulation is wildly underinclusive when judged against its asserted justification, which in our view is alone enough to defeat it.”).

In sum, California has not established a compelling state interest in protecting minors from harm allegedly associated with Internet usage.

B. The AADC Is Not Narrowly Tailored

Even assuming there is a compelling state interest in protecting minors from harms online, the AADC’s provisions restricting the collection and use of data for curating speech and targeted advertising are not narrowly tailored to that end. They are much more likely to lead to the complete exclusion of minors from online platforms, foregoing the many benefits of Internet usage. See Social Media and Adolescent Health at 4-5 (listing benefits of social media usage for adolescents). A less restrictive alternative would be promoting the use of practical and technological means by parents and minors to avoid the harms associated with Internet usage, or to avoid specifically harmful forms of Internet use.

For instance, the AADC requires covered online platforms to “[e]stimate the age of child users with a reasonable level of certainty appropriate to the risks” or “apply the privacy and data protections afforded to children” under the Act to “all consumers.” Cal. Civ. Code § 1798.99.31(a)(5). These privacy and data protections would severely limit by default the curation of speech and targeted advertising. See Cal. Civ. Code § 1798.99.31(a)(6); (b)(2)-(4). This would reduce the value of the online platforms to all users, who would receive less relevant content and advertisements.

Rather than leading to more privacy protection for minors, such a provision could result in more privacy-invasive practices or the exclusion of minors from the benefits of online platforms altogether. There is simply no foolproof method for estimating a user’s age.

Platforms typically use one of four methods: self-declaration, user-submitted hard identifiers, third-party attestation, and inferential age assurance. See Scott Babwah Brennen & Matt Perault, Keeping Kids Safe Online: How Should Policymakers Approach Age Verification?, at 4 (The Ctr. for Growth and Opportunity at Utah State University and University of North Carolina Ctr. on Tech. Pol’y Paper, Jun. 2023), https://www.thecgo.org/wp-content/uploads/2023/06/Age-Assurance_03.pdf. Each method comes with tradeoffs. While self-declaration allows users to simply lie about their age, other methods can be quite privacy-invasive. For instance, requiring users to submit hard identifiers, like a driver’s license or passport, may enable platforms to more accurately assess age in some circumstances and may make it more difficult for minors to fabricate their age, but it also poses privacy and security risks. It requires platforms to collect and process sensitive data, requires platforms to develop expertise in ID verification, and may create barriers to access for non-minor users who lack an acceptable form of identification. Courts have consistently found age verification requirements to be an unconstitutional barrier to access to online content. See Aschroft v. ACLU; NetChoice, LLC v. Griffin; NetChoice v. Yost, 2024 WL 555904 (S.D. Ohio, Feb. 12, 2024); Free Speech Coal., Inc. v. Colmenero, 2023 WL 5655712, at *15-16 (W.D. Tex. Aug. 31, 2023) (available age verification services “amplif[y]” privacy concerns and “exacerbate[]” “First Amendment injury,” including chilling effect).

But even age assurance or age estimation comes with downsides. For instance, an online platform could use AI systems to estimate age based on an assessment of the content and behavior associated with a user. But to develop this estimate, platforms must implement technical systems to collect, review, and process user data, including minors’ data. These methods may also result in false positives, where a platform reaches an inaccurate determination that a user is underage, which would result in a different set of privacy defaults under the AADC. See Cal. Civ. Code § 1798.99.31(a)(6); (b)(2)-(4). Errors are sufficiently common that some platforms have instituted appeals mechanisms so that users can contest an age-related barrier. See, e.g., Minimum age appeals on TikTok, TikTok, https://support.tiktok.com/en/safety-hc/account-and-user-safety/minimum-age-appeals-on-tiktok (last accessed Feb. 12, 2024). Not only is the development of such mechanisms costly to online platforms, but is potentially very costly to those mislabeled as well.

Another possibility is that online platforms may restrict access by users who they have any reason to believe to be minors to avoid significantly changing their business models predicated on curation and targeted advertising. Cf. Op. at 8 (noting evidence that “age-based regulations would ‘almost certain[ly] [cause] news organizations and others [to] take steps to prevent those under 18 from accessing online news content, features, or services.’”) (quoting Amicus Curiae Br. of New York Times Co. & Student Press Law Ctr. at 6).

The reason why this is likely flows from an understanding of the economics of multisided markets mentioned above. Restricting the already limited expected revenue from minors through limits on the ability to do targeted advertising, combined with strong civil penalties for failure to live up to the provisions of the AADC with respect to minors, will encourage online platforms to simply exclude them altogether. See Cal. Civ. Code § 1798.99.35(a) (authorizing penalties of up to $7,500 per “affected child”).

Much less restrictive alternatives are possible. California could promote online education for both minors and parents which would allow them to take advantage of widely available technological and practical means to avoid online harms. Cf. Ashcroft, 542 U.S. at 666-68 (finding filtering software is a less restrictive alternative than age verification to protect minors from inappropriate content). Investing in educating the youth in media literacy could be beneficial for avoiding harms associated with problematic Internet use. See Social Media and Adolescent Health at 8-10 (arguing for training and education so young people can be empowered to protect themselves).

If anything, there are more technological ways for parents and minors to work together to avoid online harms today. For instance, there are already tools to monitor and limit how minors use the Internet available from cell carriers and broadband providers, on routers and devices, from third-party applications, and even from online platforms themselves. See Ben Sperry, A Coasean Analysis of Online Age-Verification and Parental-Consent Regimes, at 20-21 (ICLE Issue Brief 2023-11-09), https://laweconcenter.org/wp-content/uploads/2023/11/Issue-Brief-Transaction-Costs-of-Protecting-Children-Under-the-First-Amendment-.pdf. Even when it comes to privacy, educating parents and minors on how to protect their information when online would be a less restrictive alternative than restricting the use of data collection for targeted advertising.

CONCLUSION

The free marketplace of ideas is too important to be restricted, even in the name of protecting children. Minors must be able to benefit from the modern public square that is the Internet. The AADC would throw “the baby out with the bathwater.” Op. at 16. The court should affirm the judgment of the district court.

[1] All parties have consented to the filing of this brief.  See Fed. R. App. P. 29(a)(2).  No counsel for any party authored this brief in whole or in part, no party or party’s counsel has contributed money intended to fund the preparation or submission of the brief, and no individual or organization contributed funding for the preparation and submission of the brief.  See id. 29(a)(4)(E).

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Innovation & the New Economy

March-Right-on-In Rights?

TOTM The National Institute for Standards and Technology (NIST) published a request for information (RFI) in December 2023 on its “Draft Interagency Guidance Framework for Considering . . .

The National Institute for Standards and Technology (NIST) published a request for information (RFI) in December 2023 on its “Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights.” It’s quite something, if not in a good way.

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Intellectual Property & Licensing

ICLE’s Amicus Briefs on the Future of Online Speech

TOTM Over the past few months, we at the International Center for Law & Economics (ICLE) have endeavored to bring the law & economics methodology to . . .

Over the past few months, we at the International Center for Law & Economics (ICLE) have endeavored to bring the law & economics methodology to the forefront of several major public controversies surrounding online speech. To date, ICLE has engaged these issues by filing two amicus briefs before the U.S. Supreme Court, and another in Ohio state court.

The basic premise we have outlined is that online platforms ought to retain the right to engage in the marketplace of ideas by exercising editorial discretion, free from government interference. A free marketplace of ideas best serves both the users of these platforms, and society at-large.

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Innovation & the New Economy

Google’s Search Service Is Not a Phone or Rail Company as Ohio AG Yost Contends in Lawsuit

Popular Media Ohio has made the news, but not for the success of Ohio State football or the induction of a new musical act into the Rock . . .

Ohio has made the news, but not for the success of Ohio State football or the induction of a new musical act into the Rock and Roll Hall of Fame. This time, it’s because of Ohio Attorney General Dave Yost’s quixotic effort to have Google’s search engine declared a common carrier.

Traditionally, a common carrier is a business that opens itself indiscriminately to public use. It is on this basis that Ohio, other states, and the federal government all have imposed nondiscrimination requirements on entities like railroads and telephone companies.

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Innovation & the New Economy

ICLE Amicus to US Supreme Court in Murthy v Missouri

Amicus Brief INTEREST OF AMICUS CURIAE[1] The International Center for Law & Economics (“ICLE”) is a nonprofit, nonpartisan global research and policy center aimed at building the . . .

INTEREST OF AMICUS CURIAE[1]

The International Center for Law & Economics (“ICLE”) is a nonprofit, nonpartisan global research and policy center aimed at building the intellectual foundations for sensible, economically sound policy.  ICLE promotes the use of law-and-economics methods and economic learning to inform policy debates.

ICLE has an interest in ensuring that First Amendment law promotes the public interest, the rule of law, and a rich marketplace of ideas.  To this end, ICLE’s scholars write extensively on social media regulation and free speech.  E.g., Int’l Ctr. for Law & Econ. Am. Br., Moody v. NetChoice, LLC, NetChoice, LLC v. Paxton, Nos. 22-277, 22-555 (Dec. 7, 2023); Ben Sperry, Knowledge and Decisions in the Information Age: The Law & Economics of Regulating Misinformation on Social-Media Platforms, 59 Gonzaga L. Rev. ___ (2024) (forthcoming); Geoffrey Manne, Ben Sperry & Kristian Stout, Who Moderates the Moderators?: A Law & Economics Approach to Holding Online Platforms Accountable Without Destroying the Internet, 49 Rutgers Computer & Tech. L. J. 26 (2022); Internet Law Scholars Am. Br., Gonzalez v. Google LLC, 21-1333 (Jan. 19, 2023); Ben Sperry, An L&E Defense of the First Amendment’s Protection of Private Ordering, Truth on the Market (Apr. 23, 2021), https://bit.ly/49tZ7XD.

ICLE is concerned about government meddling in—and the resulting impoverishment of—the marketplace of ideas.  That meddling is on display in this case—and another case before the Court this Term.  See No. 22-842, Nat’l Rifle Ass’n of Am. v. Vullo (state official coerced insurance companies not to partner with gun-rights organization to cover losses from gun use).  But this case and Vullo merely illustrate a larger problem.  See Backpage.com, LLC v. Dart, 807 F.3d 229 (7th Cir. 2015) (sheriff campaigned to shut down Backpage.com by pressuring Visa and Mastercard to stop processing Backpage transactions); Heartbeat Int’l, Inc. Am. Br. at 4–10, Vullo, supra (collecting examples); Will Duffield, Jawboning Against Speech: How Government Bullying Shapes the Rules of Social Media, Cato Inst. (Sept. 12, 2022) (collecting examples), bit.ly/41NEhjb; Victor Nava, Amazon “censored” COVID-19 vaccine books after “feeling pressure” from Biden White House: docs, New York Post (Feb. 5, 2024), https://bit.ly/3Sq5152.  With this brief, ICLE urges the Court to enforce the Constitution to protect the marketplace of ideas from all such government intrusions.

SUMMARY OF ARGUMENT

The First Amendment protects a public marketplace of ideas free from government interference.

“The First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good.” Sorrell v. IMS Health Inc., 564 U.S. 552, 577 (2011) (citation omitted).

“Our representative democracy only works if we protect the ‘marketplace of ideas.’  This free exchange facilitates an informed public opinion, which, when transmitted to lawmakers, helps produce laws that reflect the People’s will.  That protection must include the protection of unpopular ideas, for popular ideas have less need for protection.”  Mahanoy Area Sch. Dist. v. B.L., 594 U.S. ___, 141 S. Ct. 2038, 2046 (2021).

Without a free marketplace of ideas, bad ideas persist and fester.  With a free marketplace of ideas, they get challenged and exposed.  When we think of the marketplace, we think of Justice Holmes dissenting in Abrams v. United States, 250 U.S. 616, 630 (1919).  But the insight behind the concept dates back thousands of years, at least to the Hebrew Bible, and has been recognized by, among others, John Milton, the Founders, and John Stuart Mill.  The insight is that the solution for false speech is true speech.  The government may participate in the marketplace of ideas by speaking for itself.  But it ruins the marketplace by coercing speech.

This Court has long stressed the danger of restricting speech on public health, where information can save lives. Several respondents here are elite professors of medicine who dissented from the scientific judgments of government officials. The professors were just the kind of professionals whose views the public needed to make informed decisions.  Instead, the government pressured social media websites to suppress the professors’ views, which the government –at least at the time—saw as outside the mainstream.

Government intervention like this undermines the scientific enterprise.  The goal of science is not to follow the current consensus, but to challenge it with hard data.  For that challenge to happen, the government must not interfere with the open marketplace of ideas, where the current consensus can always yield to a new and better one.

As the “purchasers” in the marketplace of ideas, the people—including respondents here—were stripped of their First Amendment right to make informed decisions on crucial matters of public health. The right to speak includes a corresponding right to receive speech.  Based on the record here, respondent states can likely show that petitioners trampled on their right to receive information and ideas published by websites.  Similarly, respondent individuals will likely be able to show that they have been robbed of their right to hear other suppressed speakers. Today, the marketplace of ideas is stocked, in part, by social media companies exercising editorial discretion. What distinguishes one site from another is what it will, and will not, publish.  As commentators have noted, in the online world, content moderation is the product.  Social media companies are what economists call multi-sided platforms, which connect advertisers with users by curating third-party speech.  The better platforms become at curating speech, the more users engage, and the more valuable advertising becomes to advertisers and users alike.

At times, keeping users engaged requires removing harmful speech or even disruptive users.  But platforms must strike a balance in their content-moderation policies—allowing enough speech to attract users, but not so much speech that users are driven away.  Operating in the marketplace, social media companies are best placed to strike this balance.

Even if the online marketplace did not operate very efficiently (it does), it could not permissibly be controlled by the government.  The First Amendment forbids any abridgement of speech, including speech on the internet.  The way a website adjusts to the market shows what it thinks deserves “expression, consideration, and adherence,” or is “worthy of presentation” (phrases this Court has used to describe protected editorial discretion).  Pressuring social media companies to take down content changes the content of the platforms’ speech, intrudes on their editorial discretion, and violates the Constitution.

Given the record respondents have compiled, it is likely that they can show coercion by federal officials. The Fifth Circuit agreed, but its test for coercion fell short of the test applied in Bantam Books.  The focus of Bantam Books is not on the subjective understanding of the private actor, but on what the state actors objectively did—namely, was it reasonably understood as attempting to coerce private action?

Here it was.  Indeed, the allegations here include (a) many threats to have social media companies investigated, prosecuted, and regulated if they fail to remove disfavored speech, coupled with (b) extensive use of private meetings, emails, and digital portals to pressure social media companies to remove speech.  That was attempted coercion, and it was unlawful.

The remedy for unlawful coercion is an injunction against, or in some cases, damages from, government actors.  The court below focused the injunction on federal officials.  That was correct.  The marketplace of ideas—now freed from impermissible government intervention by the injunction—leaves its participants free to exercise their editorial discretion as they see fit.  The judgment should be affirmed.

ARGUMENT

I.       The First Amendment protects the marketplace of ideas from government meddling.

A.     A marketplace offering only government-approved ideas is no marketplace, logically and as historically understood.

The First Amendment protects an open marketplace of ideas.  “By allowing all views to flourish, the framers understood, we may test and improve our own thinking both as individuals and as a Nation.”  303 Creative LLC v. Elenis, 600 U.S. 570, 143 S. Ct. 2298, 2311 (2023).  “‘[I]f there is any fixed star in our constitutional constellation,’ it is the principle that the government may not interfere with ‘an uninhibited marketplace of ideas.’”  Id. (quoting West Virginia Bd. of Ed. v. Barnette, 319 U.S. 624, 642 (1943) and McCullen v. Coakley, 573 U.S. 464, 476 (2014)).

“[U]ninhibited” means uninhibited. “[T]he First Amendment protects an individual’s right to speak his mind regardless of whether the government considers his speech sensible and well intentioned or deeply ‘misguided,’ and likely to cause ‘anguish’ or ‘incalculable grief.’” 303 Creative, 143 S. Ct. at 2312 (quoting Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, Inc., 515 U.S. 557, 574 (1995) and Snyder v. Phelps, 562 U.S. 443, 456 (2011)).  “The First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good.”  Sorrell, 564 U.S. at 577 (citation omitted).  Without zealous protection, unpopular speech may be “chill[ed],” “would-be speakers [may] remain silent,” and “society will lose their contributions to the ‘marketplace of ideas.’”  United States v. Hansen, 599 U.S. 762, 143 S. Ct. 1932, 1939–40 (2023) (quoting Virginia v. Hicks, 539 U.S. 113, 119 (2003)).  Nor do speakers “shed their First Amendment protections by employing the corporate form to disseminate their speech.”  303 Creative, 143 S. Ct. at 2316.

When the marketplace of ideas is impoverished, it is not only “society” that loses (Hansen, 143 S. Ct. at 1939–40); it is democracy itself.  “Our representative democracy only works if we protect the ‘marketplace of ideas.’  This free exchange facilitates an informed public opinion, which, when transmitted to lawmakers, helps produce laws that reflect the People’s will.  That protection must include the protection of unpopular ideas, for popular ideas have less need for protection.”  Mahanoy Area Sch. Dist., 141 S. Ct. at 2046.  “A democratic people must be able to freely generate, debate, and discuss * * * ideas, hopes, and experiences.  They must then be able to transmit their resulting views and conclusions to their elected representatives[.]  Those representatives can respond by turning the people’s ideas into policies.  The First Amendment, by protecting the marketplace and the transmission of ideas, thereby helps to protect the basic workings of democracy itself.  City of Austin v. Reagan Nat’l Advert. of Austin, LLC, 596 U.S. 61, 142 S. Ct. 1464, 1476–77 (2022) (Breyer, concurring) (internal citations and quotation marks omitted).  In short, “[t]he First Amendment was fashioned to assure unfettered interchange of ideas for the bringing about of political and social changes desired by the people.”  Meyer v. Grant, 486 U.S. 414, 421 (1988) (internal citation and quotation marks omitted).

Without a free marketplace of ideas, bad ideas flourish, unchallenged by competition. “[T]ime has upset many fighting faiths”; and “the ultimate good desired is better reached by free trade in ideas—that the best test of truth is the power of the thought to get itself accepted in the competition of the market[.]  That at any rate is the theory of our Constitution.”  Abrams, 250 U.S. at 630 (Holmes, J., dissenting).  With a free marketplace, however, people enjoy the liberty to be wrong—even as their mistaken ideas tend to get exposed.  For this reason, after the divisive presidential election of 1800, winner Thomas Jefferson urged toleration of dissenters.  Even those in favor of changing our form of government, he urged, should be left “undisturbed as monuments of the safety with which error of opinion may be tolerated where reason is left free to combat it.”  First Inaugural Address (Mar. 4, 1801), https://bit.ly/42tAxUt.

Of course, neither Holmes nor Jefferson was the first to recognize that the best ideas emerge from the crucible of competition.  Thousands of years before the American republic, the Hebrew Bible observed that  “[t]he one who states his case first seems right, until the other comes and examines him.”  Prov. 18:17.   Much later, John Milton and John Stuart Mill would sound similar themes.  “Even a false statement may be deemed to make a valuable contribution to public debate, since it brings about ‘the clearer perception and livelier impression of truth, produced by its collision with error.’”  N.Y. Times Co. v. Sullivan, 376 U.S. 254, 279 n.19 (1964) (quoting Mill, On Liberty 15 (1947) and citing Milton, Areopagitica, Prose Works, Vol. II 561 (1959)).

In sum, “[t]he remedy for speech that is false is speech that is true.  This is the ordinary course in a free society.  The response to the unreasoned is the rational; to the uninformed, the enlightened; to the straight-out lie, the simple truth.”  United States v. Alvarez, 567 U.S. 709, 727–28 (2012) (plurality).  “And suppression of speech by the government can make exposure of falsity more difficult, not less so.  Society has the right * * * to engage in open, dynamic, rational discourse.  These ends are not well served when the government seeks to orchestrate public discussion through content-based mandates.”  Id. at 728.  “If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence.”  Whitney v. California, 274 U.S. 357, 377 (1927) (Brandeis, J., concurring).

Of course, the government itself may participate in the marketplace of ideas. Government agencies concerned about health or election misinformation may use social media platforms to broadcast their message.  Those agencies may even amplify and target their counter-speech through advertising campaigns tailored to those most likely to share or receive misinformation—including by creating their own apps or social media websites.

All these steps would combat alleged online misinformation in a way that promotes the marketplace of ideas rather than restricting it.  What is more, presidents may always directly use the bully pulpit to advocate their views.  Pet. Br. 24–25 (listing examples of presidential statements criticizing protected speech).  What the government may not do, as petitioners necessarily concede, is “use its authority to suppress contrary views.”  Id. at 23.  As the record shows, that is exactly what happened in this case.

Finally, protecting the marketplace of ideas from government interference of course does not guarantee that the best ideas win. To the contrary, the marketplace will still see a “good deal of market failure”—if success is measured by the truth winning out. Ronald Coase, The Market for Goods and the Market for Ideas, 64 Am. Econ. Rev. 384, 385 (1974).  But “that different costs and benefits must be balanced does not in itself imply who must balance them,” much less how the balance should be struck.  Thomas Sowell, Knowledge and Decisions 240 (1996).

In the First Amendment, the Founders struck the balance in favor of liberty.  However flawed an open marketplace of ideas may be, they decided, it is better than censorship.  “The liberal defense of free speech is not based on any claim that the market for ideas somehow eliminates error or erases human folly.  It is based on a comparative institutional analysis in which most state interventions make a bad situation worse.”  Roger Koppl, Expert Failure 217 (2018).

B.     As this Court instructs, it is especially crucial that the marketplace of ideas be uninhibited on matters of public health.

It is precisely this judgment of the Founders—that state interventions in the marketplace of ideas “make a bad situation worse” (Koppl, supra, at 217) —that petitioners here ignored.  White House officials pressured websites to take down “[c]laims that have been ‘debunked’ by public health authorities.”  J.A. 98.  So-called misinformation was itself dubbed an “urgent public health crisis.”  J.A. 113.  Indeed, said the Surgeon General, “misinformation poses an imminent threat to the nation’s health and takes away the freedom to make informed decisions.”  J.A. 125 (emphasis added).  These assertions are dead wrong—backwards even.  Public health is the last area in which the government should be deciding “which ideas should prevail.”  Nat’l Inst. of Family & Life Advocates v. Becerra, 138 S. Ct. 2361, 2375 (2018) (“NIFLA”).  “[T]his Court has stressed the danger of content-based regulations ‘in the fields of medicine and public health, where information can save lives.’”  Ibid. (quoting Sorrell, 564 U.S. at 566 (striking down statute restricting publication of pharmacy records)).

Several respondents here are professors of medicine at elite institutions who disagreed with the scientific judgments of government officials.  In other words, they were just the kind of professionals whose views the public needed “to make informed decisions.” J.A. 125.  Instead, the government pressured social media websites to suppress these professionals’ views, which the government at the time viewed as outside the mainstream.

“As with other kinds of speech, regulating the content of professionals’ speech ‘pose[s] the inherent risk that the Government seeks not to advance a legitimate regulatory goal, but to suppress unpopular ideas[.]’”  NIFLA, 138 S. Ct. at 2374 (quoting Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 641 (1994)).  “Take medicine, for example.  Doctors help patients make deeply personal decisions, and their candor is crucial.”  NIFLA, 138 S. Ct. at 2374.  Yet “[t]hroughout history, governments have ‘manipulat[ed] the content of doctor-patient discourse’ to increase state power and suppress minorities”:

For example, during the Cultural Revolution, Chinese physicians were dispatched to the countryside to convince peasants to use contraception. In the 1930s, the Soviet government expedited completion of a construction project on the Siberian railroad by ordering doctors to both reject requests for medical leave from work and conceal this government order from their patients.  In Nazi Germany, the Third Reich systematically violated the separation between state ideology and medical discourse. German physicians were taught that they owed a higher duty to the ‘health of the Volk’ than to the health of individual patients. Recently, Nicolae Ceausescu’s strategy to increase the Romanian birth rate included prohibitions against giving advice to patients about the use of birth control devices and disseminating information about the use of condoms as a means of preventing the transmission of AIDS. – Ibid. (quoting Thomas Berg, Toward a First Amendment Theory of Doctor-Patient Discourse and the Right To Receive Unbiased Medical Advice, 74 B. U. L. Rev. 201, 201–202 (1994) (footnotes omitted)).

None of this government interference makes sense if the goal is to discover the truth.  And that is the goal of the scientific enterprise:  to discover the truth by testing hypotheses.  The goal is not to follow the current consensus.  “The notion that scientists should agree with a consensus is contrary to how science advances—scientists challenge each other, ask difficult questions and explore paths untaken.  Expectations of conformance to a consensus undercuts scientific inquiry.  It also lends itself to the weaponization of consensus to delegitimize or deplatform inconvenient views, particularly in highly politicized settings.”  Roger Pielke, Jr., The Weaponization of “Scientific Consensus,” American Enterprise Institute (Feb. 5, 2024), https://bit.ly/3OBH3Tj.

We saw just this politicization during the recent pandemic.  “Reputable scientists and physicians have questioned—and in many cases debunked—the ‘official’ narratives on lockdowns, school closures, border testing, vaccine mandates, endless boosters, bivalent COVID shots, epidemic forecasting, natural immunity, vaccine-induced myocarditis, and more.  * * *  But it’s become untenable for those in charge to defend many of their initial positions.”  Matt Strauss, Marta Shaw, J. Edward Les & Pooya Kazemi, COVID dissent wasn’t always misinformation, but it was censored anyway, National Post (Mar. 1, 2023), https://bit.ly/3SQZ6Yb.  Yet that did not stop many of those in charge, in the meantime, from using government power effectively to censor dissenters.  That is what happened in this case.  As one liberal member of Congress said of the “lab leak” theory of COVID’s origin—itself a key exhibit in the shifting of accepted thinking about COVID—“If you take partisan politics and you mix that with science * * *, it’s a toxic combination.”  Sheryl Gay Stolberg & Benjamin Mueller, Lab Leak or Not? How Politics Shaped the Battle Over Covid’s Origin, New York Times (Mar. 19, 2023) (quoting U.S. Rep. Anna Eshoo).

In sum, “[p]rofessionals might have a host of good-faith disagreements, both with each other and with the government, on many topics in their respective fields.  Doctors and nurses might disagree about the ethics of assisted suicide or the benefits of medical marijuana; lawyers and marriage counselors might disagree about the prudence of prenuptial agreements or the wisdom of divorce; bankers and accountants might disagree about the amount of money that should be devoted to savings or the benefits of tax reform.  ‘[T]he best test of truth is the power of the thought to get itself accepted in the competition of the market,’ and the people lose when the government is the one deciding which ideas should prevail.”  NIFLA, 138 S. Ct. at 2374–75 (quoting Abrams, 250 U.S. at 630 (Holmes, J., dissenting)).  The people lost here.

C.     A marketplace offering only government-approved ideas violates the rights of speakers and listeners, the overlooked “purchasers” in the marketplace.

The people’s loss is constitutionally cognizable.  As the “purchasers” in the marketplace of ideas, the people—including respondents here—were robbed of their First Amendment right to make informed decisions.  After all, the right to speak includes a “reciprocal” right to receive speech.  Va. State Bd. of Pharm. v. Va. Citizens Consumer Council, 425 U.S. 748, 757 (1976); see First Amend. and Internet Law Scholars Am. Br., Moody v. NetChoice LLC, NetChoice LLC v. Paxton, Nos. 22-277, 22-555, at 4–5 (Dec. 6, 2023) (collecting authorities).  “To suppress free speech is a double wrong.  It violates the rights of the hearer as well as those of the speaker.  It is just as criminal to rob a man of his right to speak and hear as it would be to rob him of his money.”  Frederick Douglass, Address: A Plea for Free Speech in Boston (1860), in Great Speeches by Frederick Douglass 48, 50 (2013) (quoted in First Amend. and Internet Law Scholars Am. Br, supra, at 4–5).

Stated differently, “[t]he First Amendment protects ‘speech’ and not just speakers.”  Eugene Volokh, Mark Lemley & Peter Henderson, Freedom of Speech and AI Output, 3 J. Free Speech L. 653, 656 (2023).  As a result, “th[is] Court has long recognized First Amendment rights ‘to hear’ and ‘to receive information and ideas.’”  Id. at 657 & n.11 (citing, among other cases, Kleindienst v. Mandel, 408 U.S. 753, 762–763 (1972) (“In a variety of contexts this Court has referred to a First Amendment right to receive information and ideas”) (internal quotation marks omitted); Stanley v. Georgia, 394 U.S. 557, 564 (1969) (“It is now well established that the Constitution protects the right to receive information and ideas.”); Thomas v. Collins, 323 U.S. 516, 534 (1945) (“That there was restriction upon Thomas’ right to speak and the rights of the workers to hear what he had to say, there can be no doubt.”)).

Based on the record respondents have built, Missouri and Louisiana can likely show that petitioners have trampled on their right to “hear” and to “receive information and ideas” published by websites.  Volokh, supra, at 656–657; Resp. Br. 25–27.  And by the same token, respondent individuals will likely be able to show that they have been robbed of their right to hear other suppressed speakers, “whom [respondents] follow, engage with, and re-post on social media.”  Resp. Br. 22.  The judgment should be affirmed.

II.    Websites stock the online marketplace of ideas by exercising editorial discretion.

By effectively forcing websites to take down certain content, the government here “alte[red] the content of [the websites’] speech.”  NIFLA, 138 S. Ct. at 2371 (internal citation omitted).  Such laws “are presumptively unconstitutional and may be justified only if the government proves that they are narrowly tailored to serve compelling state interests.”  Reed v. Town of Gilbert, 576 U.S. 155, 163 (2015).  “This stringent standard reflects the fundamental principle that governments have no power to restrict expression because of its message, its ideas, its subject matter, or its content.”  NIFLA, 138 S. Ct. at 2371 (internal citation and quotation marks omitted).  Nor is government control necessary in the competitive marketplace of ideas stocked by social media companies.

What distinguishes one site from another is what it publishes and refuses to publish. “[C]ontent moderation is the product.” Thomas Germain, Actually, Everyone Loves Censorship. Even You., GIZMODO (Feb. 22, 2023) (emphasis added), http://bit.ly/3Rge8pI.  As private participants in the marketplace of ideas, social media firms set their own editorial policies and choose which ideas to publish.  “The Free Speech Clause does not prohibit private abridgment of speech.”  Manhattan Cmty. Access Corp. v. Halleck, 139 S. Ct. 1921, 1928 (2019) (emphasis in original).  Even as they openly publish the speech of others, social media platforms do not “lose the ability to exercise what they deem to be appropriate editorial discretion,” because then they would “face the unappetizing choice of allowing all comers or closing the platform altogether.”  Id. at 1931.  In turn, users participate in the marketplace of ideas by choosing which social media website best meets their needs, including through its respective moderation policies.

Social media firms are what economists call “matchmakers” or “multi-sided” platforms.  David Evans & Richard Schmalensee, Matchmakers: The New Economics of Multisided Platforms 10 (2016).  “[M]atchmakers’ raw materials are the different groups of customers that they help bring together.  And part of the stuff they sell to members of each group is access to members of the other groups.  All of them operate physical or virtual places where members of these different groups get together.  For this reason, they are often called multisided platforms.”  Ibid.  Social media firms bring together advertisers and users—including both speakers and listeners—by curating third-party speech.  Curating speech well keeps users engaged so advertisers can reach them.

At times, keeping users engaged requires removing harmful speech, or even removing users who break the rules.  See David Evans, Governing Bad Behavior by Users of Multi-Sided Platforms, 27 Berkeley Tech. L.J. 1201, 1215 (2012).  But a social media company cannot go too far in restricting speech that users value.  Otherwise, users will visit the platform less or even abandon it for other companies in the “attention market”—which includes not only other platforms, but newspapers, magazines, television, games, and apps.  Facing the prospect of fewer engaged users, advertisers will expect lower returns and invest less in the platform.  Eventually, if too many customers flee, the social media company will fail.

Social media companies must also consider brand-conscious advertisers who may not want to be associated with perceived misinformation or other harmful speech.  To take just one example, advertisers reportedly left X after that company loosened its moderation practices.  Ryan Mac, Brooks Barnes & Tiffany Hsu, Advertisers Flee X as Outcry Over Musk’s Endorsement of Antisemitic Post Grows, N.Y. Times (Nov. 17, 2023).  In other words, platforms must strike a balance in their content-moderation policies.  This balance includes creating rules discouraging misinformation if such speech drives away users or advertisers.  As active participants in the marketplace, social media firms are best positioned to discover the best way to serve their users.  See Int’l Ctr. for Law & Economics Am. Br. at 6–11, Moody v. NetChoice LLC, NetChoice LLC v. Paxton, Nos. 22-277, 22-555 (Dec. 7, 2023).  As competition plays out, though, consumers can deliver surprises—and platforms must adjust.  This is the marketplace of ideas in action.

All these product changes happen without government intervention, which, again, would be forbidden in any event. After all, the First Amendment forbids any “abridg[ement]” of speech, no matter where that speech is “publish[ed]” or “disseminat[ed]”—including the online marketplace of ideas. Reno v. ACLU, 521 U.S. 844, 853 (1997); 303 Creative, 600 U.S. at 594.  The way a social media company adjusts to the market shows what it deems “deserving of expression, consideration, and adherence,” or “worthy of presentation.”  Turner, 512 U.S. at 641; Hurley, 515 U.S. at 575.  By forcing platforms to take down content, government coercion “alte[red] the content of [the platforms’] speech.”  NIFLA, 138 S. Ct. at 2371 (internal citation omitted).

When a company “exercises editorial discretion in the selection and presentation of its programming, it engages in speech activity.”  Arkansas Ed. Television Comm’n v. Forbes, 523 U.S. 666, 674 (1997).  “[E]ditorial control” encompasses the “choice of material,” “decisions made as to limitations on the size and content,” and “treatment of public issues[.]”  Miami Herald Pub. Co. v. Tornillo, 418 U.S. 241, 258 (1974).  Any governmental “compulsion to publish that which reason tells them should not be published”—or vice versa—“is unconstitutional.”  Id. at 256 (internal citation and quotation marks omitted).

III. The online marketplace of ideas was impoverished by federal coercion here, and the Court should affirm the injunction insofar as it binds federal officials.

Although social media companies are private actors with a right to editorial discretion, the facts adduced so far in this case, if ultimately established, show coercion by federal officials, and not the exercise of discretion by websites. Relying on an extensive record, “the district court concluded that the officials, via both private and public channels, asked the platforms to remove content, pressed them to change their moderation policies, and threatened them—directly and indirectly—with legal consequences if they did not comply. And it worked—that ‘unrelenting pressure’ forced the platforms to act and take down users’ content.”  J.A. 16–17.

The Fifth Circuit agreed, holding that federal officials likely “ran afoul of the First Amendment by coercing and significantly encouraging social-media platforms to censor disfavored [speech], including by threats of adverse government action like antitrust enforcement and legal reforms.”  J.A. 32 (internal citations and quotation marks omitted).  In reaching this conclusion, the Fifth Circuit adopted a four-part test, ostensibly derived from Bantam Books, Inc. v. Sullivan, 372 U.S. 58 (1963), to tell when government actions aimed at private parties become coercive: “(1) the speaker’s word choice and tone; (2) “?whether the speech was perceived as a threat?”; (3) “?the existence of regulatory authority?”; and, “perhaps most importantly, (4) whether the speech refers to adverse consequences.”  J.A. 42 (internal citations and quotation marks omitted)

But the Fifth Circuit’s test falls short of the test applied in Bantam Books.  The focus of Bantam Books is not on the subjective understanding of the private actor, but on what the state actors objectively did—namely, was it reasonably understood as attempting to coerce private action.  The Bantam Books test is about the efforts of the state actor to suppress speech, not whether the private actor is in some hyper-literal sense “free” to ignore the state actor.  Surreptitious pressure in the form alleged by respondents is just as much an intervention into the marketplace of ideas as overt censorship.

Consider what happened in Bantam Books.  A legislatively created commission notified book publishers that certain books and magazines were objectionable for sale or distribution.  The commission had no power to sanction publishers or distributors, and there were no bans or seizures of books.  372 U.S. at 66–67.  In fact, the book distributors were technically “free” to ignore the commission’s notices.  Id. at 68 (“It is true * * * that [the distributor] was ‘free’ to ignore the Commission’s notices, in the sense that his refusal to ‘cooperate’ would have violated no law.”).  Nonetheless, this Court held, “the Commission deliberately set about to achieve the suppression of publications deemed ‘objectionable’ and succeeded in its aim.”  Id. at 67.  Particularly important was that the notices could be seen as a threat of prosecution.  See id. at 68–69 (“People do not lightly disregard public officers’ thinly veiled threats to institute criminal proceedings against them if they do not come around[.]  The Commission’s notices, phrased virtually as orders, reasonably understood to be such by the distributor, invariably followed up by police visitations, in fact stopped the circulation of the listed publications[.]  It would be naive to credit the State’s assertion that these blacklists are in the nature of mere legal advice, when they plainly serve as instruments of regulation.”).

Ignoring this lesson of Bantam Books, petitioners focus on the subjective response of social media companies rather than the objective actions of the government.  Petitioners emphasize that media companies did not always censor speech to the degree that federal officials asked.  Br. 39.  But under Bantam Books, that is not the question.  The question is whether the government’s communications could reasonably be seen as a threat.  372 U.S. at 68–69.

They could.  Indeed, the allegations here include (a) many threats to have social media firms investigated, prosecuted, and regulated if they failed to remove disfavored speech, coupled with (b) extensive use of private meetings, emails, and digital portals to pressure firms to remove speech.  Resp. Br. 2–16.  As a result of this pressure, social media firms removed speech against their policies and changed their policies.  Ibid.  Much as in Bantam Books, government pressure suppressed lawful speech.

All this government coercion is a first-order infringement of speech and an impermissible intervention into the marketplace of ideas.  It also destroys the business model of social media websites.  As multisided platforms, these companies must carefully balance users, advertisers, and speech.  Government intervention disrupts this careful balance.  Again, the value proposition of social media websites is that they—as actors in the market—are best situated to curate forums attractive to their users.  Destroying these privately curated forums will chill speech for all Americans.  The Court should find that respondents are likely to succeed on the merits of their First Amendment claim.

As noted, the government is free to use the bully pulpit to persuade—and even to argue publicly that certain content on social media platforms is misinformation that should be demoted or removed. Pet. Brief 23–25 (listing examples of presidential statements criticizing protected speech).  But this does not mean the First Amendment allows coercing private actors into shutting down speech, which is what is shown by the facts adduced here.

The remedy for unlawful government coercion is an injunction against, or in specific cases, damages from, government actors. Here, the District Court and Fifth Circuit rightly focused the injunction against federal officials.  That was correct.  The marketplace of ideas, now freed from impermissible government intervention, leaves its participants free to exercise their editorial discretion as they see fit.  There is no need to enjoin private actors; and, indeed, doing so would undermine the same freedom of expression that enjoining coercive government actors protects.  On remand, the injunction should continue to make clear that social media companies may continue to engage in the marketplace of ideas by exercising editorial discretion.  But the government may not press its thumb on the scale by compelling them to censor.

CONCLUSION

The judgment should be affirmed.

[1] No party or counsel for a party authored this brief in whole or in part.  No one other than amicus or its counsel made a monetary contribution to fund preparation or submission of this brief.

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Innovation & the New Economy

Pigou’s Plumber

Scholarship Abstract Standard accounts of why we have administrative agencies do little to account for those agencies’ ability to generate new information that can inform the . . .

Abstract

Standard accounts of why we have administrative agencies do little to account for those agencies’ ability to generate new information that can inform the regulatory process. Even expertise-based understandings of the administrative state limit the role of agencies to gathering information; and prevailing understandings of the administrative state view agencies as engaged in a policy-development exercise checked by theories of political accountability. This is unfortunate, because, for the same reasons that Congress turns to agencies to regulate in complex policy domains, agencies are typically in the best position to generate and make productive use of information that can inform the regulatory process and help Congress to accomplish its intended legislative goals.

This article offers a new account of how we can—and should—think about agencies’ use of information in the regulatory process: regulation as a discovery process. Drawing from economic understandings of how information is produced and used in both regulation and markets, it argues that using the regulatory process to generate information and ensuring that that information is both captured and productively used to improve regulations should be a priority for administrative law. In so doing, it contributes to a growing literature that argues for more experimentation in regulation and offers an account of the administrative state that is divergent from the interest group and presidential administrative models. Specific applications of these ideas are considered. These include how viewing regulation as a discovery process can resolve tensions in the Major Questions Doctrine and the use of an Executive Order to treat regulations as data-generating natural experiments.

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Illinois Is Not as Blue as We Think. Gerrymandering Is the Problem.

Popular Media Everyone knows Illinois is a blue state. The governor’s offce, the state House, the state Senate, the Chicago mayor’s office, the state Supreme Court, Cook . . .

Everyone knows Illinois is a blue state. The governor’s offce, the state House, the state Senate, the Chicago mayor’s office, the state Supreme Court, Cook County government and so on are all in the hands of Democrats. Of the 19 people who represent Illinois in Washington, 16 are Democrats.

Read the full piece here.

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Recent Challenges to the FTC’s Constitutionality

TL;DR tl;dr Background: Created by Congress in 1914, the Federal Trade Commission (FTC) has employed in-house administrative adjudications for more than a century. The agency’s constitutionality . . .

tl;dr

Background: Created by Congress in 1914, the Federal Trade Commission (FTC) has employed in-house administrative adjudications for more than a century. The agency’s constitutionality was challenged early in its existence, and upheld by the U.S. Supreme Court in its 1935 Humphrey’s Executor decision. Federal courts have, in the years since, been hesitant to invalidate an agency that has been functioning without issue for decades. 

But… Recent rulings in Seila (2020) and Axon (2023) have raised questions about the extent to which the Supreme Court would still recognize the agency’s legitimacy. In Seila, the Court held that Humphrey’s Executor applies only when an agency “do[es] not wield substantial executive powers.” In Axon, it held that federal courts can entertain constitutional challenges even while an administrative adjudication is pending. 

Such rulings have paved the way for challenges to the FTC’s constitutionality. Most notably, Meta filed a challenge in November 2023 after the FTC sought to use administrative adjudication to modify a 2020 consent decree. Amgen brought a similar challenge in response to merger proceedings, as did Walmart during anti-fraud proceedings. Six primary arguments have been raised against the FTC’s constitutionality.

KEY TAKEAWAYS

FTC COMMISSIONERS ARE INSULATED FROM PRESIDENTIAL REMOVAL

By statute, the president of the United States may remove commissioners of the FTC only “for inefficiency, neglect of duty, or malfeasance in office.” Humphrey’s Executor upheld this process, because the FTC was not deemed to exercise executive power. 

But the FTC has changed dramatically over the past century. In the 1970s, Congress broadened its authority to pursue injunctive relief in federal court and to seek civil penalties, which would typically be considered executive functions. The agency now functions primarily as an enforcer of laws, and much more rarely exercises its quasi-judicial and quasi-legislative powers.

In short, there is a question whether the FTC, in its current form and operations, violates the constitutional separation of powers.

THE FTC IS BOTH PROSECUTOR AND JUDGE

The FTC’s administrative-adjudication process has also raised constitutional questions. FTC staff may, following a preliminary screening, be authorized to investigate a potential violation of the law. That investigation, in turn, can lead commissioners to vote on whether to issue a complaint.

If it is not settled, the complaint is heard by an administrative law judge (ALJ) who, under recently revised agency process, issues a “recommended decision” to the commission. Previously, the ALJ would issue an “initial decision” that would stand unless the FTC or defendant sought review. 

The FTC then decides whether to accept, revise, or wholly replace the recommended decision with one of its own.  Serving as both a prosecutor and judge may violate the Fifth Amendment’s Due Process Clause.

IMPROPER DELEGATION OF LEGISLATIVE POWER

Congress enabled the FTC to decide whether to pursue adjudication in federal courts or within its own administrative process. But under the Constitution’s nondelegation doctrine, when Congress delegates any of its legislative powers, it must provide an “intelligible principle” for an agency to use that power. Some of the recent challenges argue there is no such principle governing which avenue the FTC pursues, rendering the delegation of powers unconstitutional. 

PRIVATE RIGHTS MUST BE ADJUDICATED IN ARTICLE III COURTS 

Among the broad powers conferred to the federal courts under Article III, Section 2 of the Constitution is exclusive jurisdiction to adjudicate private rights. But the FTC has been granted authority to hold administrative adjudications that can result in the deprivation of private rights (e.g., deprivation of property). Such proceedings may be unconstitutional. 

CIVIL PENALTIES WITHOUT A JURY TRIAL

The Seventh Amendment secures the right to jury trial whenever civil penalties exceed $20. This typically applies to deprivation of property rights, as well. But the FTC’s administrative adjudication does not provide for a jury trial. 

DISPARATE MERGER-REVIEW PROCESSES

Under the Hart-Scott-Rodino Act, mergers exceeding certain thresholds must be notified to both the U.S. Justice Department (DOJ) and the FTC. The agencies then follow a so-called “clearance” process to determine which will review the transaction. But the process is largely arbitrary, with some matters allocated based on one agency having more relevant experience, and some on a taking-turns basis.

Unlike the FTC, the DOJ can only challenge transactions before Article III courts, rather than in-house administrative proceedings. These alternative procedures have meaningful procedural and substantive differences. If that leads to disparate treatment, it may violate both the Fifth Amendment’s Equal Protection and Due Process clauses.

For more on this issue, see Daniel Gilman’s Law360 piece “Why Challenges To FTC Authority Are Needed.”

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Antitrust & Consumer Protection